A bid by SpiceJet (SG, Delhi International) to have an insolvency petition filed by Willis Lease Finance tossed out of court has encountered pushback from the engine lessor. Counsel for the lessor told India's National Company Law Tribunal (NCLT) on August 8 that its petition was valid, despite lawyers for the low-cost carrier questioning it.

As previously reported in ch-aviation, Willis is pursuing SpiceJet for USD6.87 million, allegedly the airline failed to meet lease payments on 11 aircraft engines. Willis Lease Finance Corporation CEO Austin Willis has told ch-aviation they had the engines placed with SpiceJet for a time and that the airline "routinely failed to live up to their promises in the leases and beyond."

An earlier insolvency petition from Willis (case no. C.P. (IB)-121/2023) was withdrawn in March after they realised some unpaid invoices in that claim related to a period during Covid-19 when the Indian government granted immunity to debtors against insolvency petitions.

Willis refiled their petition with the NCLT in April, minus those unpaid invoices. However, SpiceJet, represented by Krishnendu Dutta, has argued that the second petition is invalid because it "was for the same course of action as the first." He also said while the NCLT had permitted the withdrawal of the first petition, it had not granted permission to file a second. Willis also appears to have failed to send SpiceJet notice of its second petition, despite the rules requiring notice.

In this week's hearing, the NCLT judges orally queried why Willis did not secure the tribunal's permission to file a second petition and why they did not notify SpiceJet. Dutta argues these breaches render the second petition invalid. He also says Willis Lease Finance Corporation is not the actual lessor, having used four different SPVs in the individual lease contracts. Dutta said Willis was neither an operational creditor nor an assignee of debt but merely an SPV service provider.

Virender Ganda, appearing for Willis, said notice only needed to be provided when a new petition included new claims. However, the second Willis petition did not include new claims. Instead, it excluded some claims. He also argued it was a "mere refiling," and the notice rule did not apply to refilings. Ganda said granting permission to withdraw also implicitly granted permission to refile. Regarding the validity of Willis filing the petition, Ganda said Indian bankruptcy law does not allow the four SPVs to file a combined petition.

The NCLT will continue hearing the matter on August 11, when counsel for Willis is expected to make further arguments to keep the insolvency petition alive. Separately, Aircastle (Ireland) Limited, Wilmington Trust SP Services (Dublin), and Celestial Aviation Services Limited have all filed insolvency petitions against SpiceJet at the NCLT.

Meanwhile, in another legal matter involving SpiceJet, Sun Group chairman and former SpiceJet majority owner Kalanithi Maran wants SpiceJet to pay him 50% of their daily revenues, collected weekly, to settle a INR3.93 billion Indian rupee (USD47.5 million) debt owed to him.

Mainider Singh, appearing for Maran, appeared before the Delhi High Court on August 9 and secured orders for the airline to provide a statement of accounts and an affidavit of its assets and liabilities within one week. The matter revolves around a bank guarantee and interest claims that can be traced back to a 2015 deal between Maran and the current majority owner of SpiceJet, Ajay Singh, when ownership of the airline changed hands.

In May, exasperated by SpiceJet's delaying tactics, intransigence, and history of ignoring court orders, Justice Yogesh Khanna said he had no alternative but to order payment of the full amount claimed by Maran and gave the airline four weeks to file an affidavit detailing its assets.

This week, Maran's counsel told the same judge that no affidavit had arrived and no payments had been made. He said SpiceJet was a "wilful defaulter" and displayed a "laidback attitude" to court rulings. He also sought orders from the court for his client that 50% of SpiceJet's daily revenue be collected and paid to Maran every week to settle the debt.

The judge adjourned the matter until August 24, bringing it forward from a previous September 5 hearing date. He also ordered Ajay Singh to be in court on August 24 to answer questions about SpiceJet's non-payment and non-compliance with court orders.